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Tag: Mutual Funds

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Invest Even If You are Not Rich Yet!

Invest Even If You are Not Rich Yet!

There’s a misconception that one needs a lot of money to start investing in stocks,  mutual funds and Exchange Traded Funds (ETFs). This is the vital reason why a few  people actually do investments. One thing is for sure, one will never get rich by  concealing money under a mattress or in a bank account. In order to build wealth,  one need to invest money with time. 

Read tips given further to start investing even if you don’t have much money. 

  1. One can get started investing with small amounts of money. No matter how  small one start, the most important thing is to get started. One can always  increase the amount with time.  
  2. Get your 401K match at the bare minimum. For your information, a 401(K) plan  is generally termed as an employer-sponsored retirement plan wherein eligible  employees based on pre-set criteria can make tax-deferred contributions  from their salary or wages like the EPF contributions in India. It acts as a  hike which can range from 2- 15% of one’s annual salary depending on employer.  
  3. You’ll never be rich if you don’t invest. There are countless people who are  scared of investing. While the sad reality is that most people will never  achieve financial freedom if they don’t invest. Not investing is the huge  market risk. 
  4. Let compounding interest work its magic. Start investing on early basis. The  earlier one starts, the major shift will be taken off from one’s shoulders by  compounding interest with years. 
  5. Take control of your finances and make smarter financial decisions today with VSRK. The sooner one starts the easier it will be to get on track for  predefined financial goals, which may vary on individual level. Even if one wants to start small, get started.  

One may not be rich today, but will never be if one don’t get started. Once started,  then you will be rich one day for sure.

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Savings is Not Always Investing; Investing is Savings with Amazing Returns

Savings is Not Always Investing; Investing is Savings with Amazing Returns

Always been into savings! And now investing for the first time? It can be traumatic, puzzling, and alarming. Campaigning hard earned money requires a basic understanding of financial assets; enough knowledge and confidence to avoid common investing mistakes; and importantly an understating of your investment goals.

By the time you’re ready to start investing, you must have specific goals in mind. Having a concrete goal can help you become more visionary and dedicated to that goal, making it real through regular actions.

One need to first empower themselves with some basic know-how. The Securities and Exchange Commission (SEC) has an eminent handbook for newbie investors which explains basic concepts and difference between the types of investments.

Choosing your first investment

When choosing an investment for the first time, experts say protruding on what one is literate about. If someone does have an expertise, one has slight tilt towards being more comfortable and knowledgeable when making an initial investment. 

If one do not have a specific forte that makes you uncomfortable towards investing and that would make you like many others, no shame in it. Make another key choice and VSRK’s experts and financial analysts can help you actively managing your mutual funds. 

An initial investment should be held for at least a year, in order to avoid short-term capital gains taxes. Avoiding high turnover or excessive trading; cutting costs associated with placing multiple trades, plus their tax implications, are wise or unwise strategies depends upon novice investor’s financial goals.

As per the research done at VSRK, major issues faced by new investors are that they tend to gamble with money that they can’t even afford to lose. Secondly, unaware investors seek out exotic products online. Inverse leveraged funds can be lucrative to triple your investments within no time, but they silently carry risk and are tricky to manage after certain point of time.

We at VSRK won’t allow your first or many investments to drop. Follow VSRK to start small and grow steadily and we will act as a catalyst for your wealth of tomorrow.

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Withdraw Tax-efficient Happiness Post Retirement

Withdraw Tax-efficient Happiness Post Retirement

Everyone has to retire one day. Some people retire at an early age or some retire at their death bed. Let’s directly switch on a product which will give not only income after retirement but also will help tax planning.

Systematic Withdrawal Plan is a facility for regular cash flow with the help of mutual funds. It gives the investor, the freedom to enjoy life one has always dreamt of post retirement. One can withdraw funds from existing mutual fund outlays at pre-set interludes, be it fortnightly, monthly, quarterly or even annually, which will create a regular cash flow for both certain and uncertain needs. One can plan investments and withdrawals with tax advantage. It gives an investor more potential to gain rewards over a span of time, as one withdraws happiness bit by bit.

A Systematic Withdrawal Plan is a divesture strategy that empowers one to redeem fund units in a planned mannerism, instead of a lump sum sale. Constructively, one can withdraw investments in parts, thereby spawning a rhythmic stream of inflows.

An SWP is the antipodal of a Systematic Investment Plan, wherein one invests in mutual funds in parts. Moving funds from savings to a better performing mutual fund scheme is a SIP, while in an SWP, the movement of funds is back into savings account from already made investments. Alike, investing in mutual funds is easy on the VSRK app, withdrawals are also simple and straightforward on the app.

To execute an SWP, one need to withdraw some part of your investment at periodic intervals. Withdrawal money from investment means selling off or redeeming a chunk of the units one holds. The number of units to be sold depends on the NAV on the date one makes the withdrawal.

The period to start SWPs from one’s own funds need to be conceived well in advance to get the complete benefits. It is advisable not to go for SWP in two conditions, first is when one has cash at hand or when markets begins its downtrend. During such times, one should put money to work to achieve preset goals of wealth creation.

Retirement, the phase of life when incoming paychecks halts, is considered as a favorable time to start an SWP. 

SWP acts as a rewards of the systematic investments made during working years. People generally ask a very complicated question that for how long the SWP will last? Ultimately the length of SWP is determined by two main factors. The first is the size of the corpus and the withdrawal amount is the second one. Principally, the progressive the frequency and amount pulled out, the swifter will be the rate of abatement of the corpus.

The uptrend performance of the markets are directly proportionate to milking higher amounts through SWP. Contrarily, if markets are showing downtrend, the radius of SWP may dwindle. Making systematic withdrawals using an SWP allows you to take advantage of rupee cost averaging. 

Tax implications of SWP

When any investor makes withdrawals via SWP, it allures taxes based on type of scheme. The tax incidence on SWP depends on FIFO method and the holding period.

SWP initiated from an equity fund in the 1st year of investment, it is coined as STCG. The amount will be taxed at the rate of 15%. Whereas, if initiated after 1 year of investment, it falls under LTCG. Long term capital gains are completely tax-free. We at VSRK always suggests to do an SWP from your equity fund investments upon completion of one year.

Risk averse investors investing in Debt funds shall note that the holding period for debt funds taxation is 3 years. Any SWP initiated from the debt fund within 3 years of investment, it is considered as STCG and when initiated after 3 years of investment, it falls under LTCG which are taxed at 20%. Additionally, you can get the benefit of inflation indexation.

Concluding the words, SWPs can heavily aid in unifying income needs post retirement. In order to achieve the most of blessings, VSRK helps to plan SWP according to your requirements and tax incidence.​

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How to Beat Inflation with Investment?

Beat Inflation with Investment

Inflation, in simple terms, refers to the increase in the prices of commodities and services. It has a direct impact on the time value of your money. It means that your wealth might not have the same value after a few years. For example, if you are paying INR 20000 as rent for a 3BHK house might increase to INR 30000 in the next five years for the same flat.

There is one thumb rule to understand the effects of inflation. It is known as the ‘Rule of 70’. It says divide 70 by the rate of inflation and it will give you the number of years by when the value of your wealth by 50% of its today’s value. For example, if the current rate of inflation is 5% and you have INR 40 lakhs. After 14 years (i.e., 70/5), the value will be INR 20 lakhs.

Beat Inflation with a Portfolio of Mutual Funds

Mutual funds are a class of assets that has become one of the most popular investment options. The most looked after feature of mutual funds is the benefit of diversification. Mutual funds allow investors the advantage to invest in multiple companies across different industries. It provides a safeguard against the risk of uncertainties. Diversification helps to minimize the risks while at the same time also average outs the returns. So, any losses in any particular sectors are adjusted through high performing stock in the same portfolio.

There are also a large variety of investment options that are available in the market. Growth funds are said to be one of the best performing mutual funds in inflationary periods. Apart from this, other categories help you to reap good returns on your investments.  In the past years, equity mutual funds have shown the potential to deliver an annual return of 11% to 14% in the long term. Mutual funds give you 2 investment options. The first is to make a one-time lump sum payment, the other is in the form of SIP. You can make regular investments into best performing, starting with just INR 500 per month.

Conclusion: Making regular investments in mutual fund schemes could be considered one of the best ways to overcome the effect of inflation on your investment. It provides returns higher than the rate of inflation and minimizes associated risk by diversifications.

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11 Things You Should Know About SIP Mutual Funds

11 Things You Should Know About SIP Mutual Funds

Investing in markets is one of the most concerning decisions. As a traditional customer, you will think twice before making any large investment. But with the introduction of SIP, now the situations have changed. It is easy and convenient to make investments. Every year, the number of customers is increasing who look forward to bring their investment in SIP mutual funds. In this blog, we will give you a quick some features of SIP mutual funds.

To the customers who are just beginners in the market, SIP is a new word. SIP stands for a systematic investment plan. It is the most flexible way to invest in the market. The best thing about this plan is that you can invest per month rather than one lump sum amount. 

Eleven things you should know about SIP mutual funds:-

1. Amount of investment
SIP gives you the right to invest according to your requirements and convenience. You can start your investment with a minimum amount of Rs 100 or Rs 500 per month. A Small Amount of investment will not develop a financial burden on your head can easily maintain your financial balance.

2.Savings
SIP mutual funds can formulate monthly, annually, quarterly, and semi-annually. It develops a sense of saving habits among investors. Your saving habits play a vital role in the circulation of your money. Tax saving schemes also comes under SIP mutual funds.

3.Types
SIP mutual funds are of various types. The most common type is a hybrid mutual fund. A Hybrid mutual fund is the one under which the investment portfolio is equally divided between equity and debt financial instruments. Other types of SIP funds are Flexi SIP, Step-up SIP, Perpetual SIP, etc.

4.Timing of the market
The timing indicates the ideal time frame, where the investors can gain a maximum of the benefit in the stock markets by purchasing more units of mutual funds when the prices are comparatively low. With SIP mutual funds, you can invest throughout the year and get better returns.

5.Investments of recurring nature
You have to make regular deposits, like recurring deposits. However, in RD the returns are linked with the bank FD rates, but in the case of mutual funds, you can invest in different financial instruments that link to market-related returns.

6.Regular investment
Investing in small amounts per month will make you a burden-free and disciplined market investor. You will become smarter about your expenses and start thinking to invest maximum. The regular investment feature of SIP will help you today and in the future.

7.Objective
The main objective of SIP mutual funds is to achieve long-term accumulation of wealth. When you invest through SIP, you invest in a disciplined manner without feeling the stress of market conditions. SIP mutual funds from time to time remind you of your investments and motivate you to move ahead.

8.Safe and sure
Mostly SIP is marked as a safe and sure way of investment and an efficient way to create wealth for the long-term. SIP is generally secure regarding mutual funds. SIP gets stuck to continuous money to earn a fixed percentage of commissions or returns. It makes you worthy of a safe and secure investment nature.

9.Best for the beginners
SIP mutual funds are the best choice for beginners who don’t have experience regarding the market as it averages out the price over some time. The funds in a mutual fund are sub-invested in various sectors. Through this, the investors get the benefit of diversification. You can consult your financial adviser for SIPs which offers several plans for the beginners. 

10.Management
Financial experts regulate the SIP mutual funds. These professionals work on improving the returns of the funds. The SIP mutual fund is well managed and provides you with the best service in all possible ways.

11.Investment goal
Most people fail in investment activities due to a lack of market knowledge. SIP provides a wide range of investment options. With these various options, you develop yourself as a diversified and disciplined investor. The most common reason why people start investing is they need to save taxes. If you want to invest in SIP, you must target a specific goal. Determining the aim is an essential factor. It is necessary to know the reason behind your investment in SIP. Attach a money value to your goals. A Mutual fund (SIP) will provide you with the best returns than other investment option.

All the SIP features are present online. Online facilities provide complete services from starting till the end with ease of the internet all these services are working 24*7. Things like child education, marriage funds, home loans, retirement plans are necessary for one’s life. These require proper planning with adherence to the amount of wealth and period time. Each year the value of SIP changes. You have to understand the past, estimate the current values, and come up with future possibilities.

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What are Mutual Funds?

What are Mutual Funds?

Mutual fund is an investment fund where multiple investors pool their money to purchase securities. Such funds are managed by a highly trained professional commonly known as a fund manager or portfolio manager. This individual invests this corpus of funds into different securities such as stocks, debentures, bonds, gold, etc. as per the objective of the fund and with the aim of reaping profits out of such investment.

Let’s understand this more clearly with an example of a mutual fund known as Hybrid Equity Fund. Normally, all invest such mutual funds around 70% of the total corpus in equity, 18% in debt and 12% in other securities. Within such umbrella of securities, there are a large number of companies.

The investment of money into a various types of securities a dividend supported by fixed returns. Also, within such types of securities, example- equity, there are a lot of companies existing in various sectors such as banking, refineries, housing finance and construction, etc. This helps the corpus through the benefit of diversification so that if any of these sectors under performs there is a low impact on the overall value of investment.

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Union Budget and its Effect on MSMEs and Investment Sector

Union Budget and its Effect on MSMEs and Investment Sector

On 5th July 2019, the Union Finance Minister Nirmala Sitharaman announced the financial budget for the Assessment year 2020-21. It had many pragmatic amendments affecting the general investment practices of a regular investor and the MSMEs.

The budget has announced many changes, in the MSME sector, such as proposing ease in angel tax for start-ups, removing the requirement of scrutiny of angel tax from IT department for start-up, enabling e-verification mechanism for establishing investor identity and source of funds for start-ups, 2% interest subvention for GST-registered MSME on fresh or incremental loans, ‘stand up India’ scheme to continue till 2025, new television channel for start-ups and pension benefit extended to retail traders. All these changes are sought to have a positive impact on the MSME sector and flourish the growth of start-ups. Also, the start-ups are being given a whole set of tax benefits.

The investment sector has also met some changes such as simplification and formalisation of existing KYC norms for FPIS to make it more investor-friendly, long-term bonds for market to allow FIIS & FPIS investment in debt securities issued by NBFCs, credit guarantee enhancement corporation to be set up long-term bonds with specific focus on infra sector and propose social stock exchange under SEBI for listing social enterprises & voluntary organizations.

All these changes along with those in other sectors have led to huge swings on Budget day. An examination of trading data shows that the Sensex has swung an average of 3.1 percent in past 21 budget day sessions. The India VIX index ended at 13.53, down 1.2 percent on Thursday. The index has cooled off sharply from May’s high of 28.7.

‘We will ask SEBI to mull a rise in MPS for listed companies from 25% to 35%,’ said Finance Minister Nirmala Sitharaman, during the budget speech. While this move will ensure more public investment in equity markets it will also force corporates to go on a public offering spree.

This can be seen by the downfall of the market value of TCS by Rs. 30,400 crores after the union budget. The IT giant has a public float of 28% with Tata Sons holding the rest. If the proposal is implemented, Tata Sons would need to sell share worth Rs. 57,000 crore.

All these are implemented in order to increase the contribution of start-ups and MSMEs in the country’s economy as well as include the general public’s participation in the investments in corporate giants. The union government has also sought to spur growth with a reduction in corporate tax and sops to the housing sector, start-ups, and electric vehicles. This budget is the first since the BJP led by Prime Minister Narendra Modi returned for a second term in power and is aimed at boosting infrastructure and foreign investment. The budget is said to be presented with a 10-year vision in mind. ‘The budget is for a New India and has a roadmap to transform the agriculture sector of the country, this budget is one of hope’, says Narendra Modi.

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Is It Safe to Invest in Mutual Funds in India?

Systematic Investment Plan is investing a fixed amount at a fixed time interval(monthly, quarterly or annually) in a given Mutual Fund. An investor commits to invest a specific amount for a continuous period at regular intervals, this ensures that he gets more units when prices are lower and fewer units when prices are high, this works on the principle of rupee cost averaging when invested at different levels and automatically participate in the swing of the market. You can earn compound interest on your deposits on a monthly basis, thereby, increasing your investment amount significantly over the long run.

Choosing the Best SIP: Choosing a Right Sip is very important. Before selecting the right sip just Keep in mind the following factors, Which we have written after consulting the Best Financial Planner in Delhi-

Objective of Investing: When you think about investing in sip mutual fund, then you should have known the objective of investing. You have to ask yourself that what is the amount of risk you will have to take, and secondly the time period of investing. Then you can make a logical decision that which type of fund investing you really need.

Performance & Returns you will get: Before Going into investment, you should study about the investment plans, and the type of funds. Make a comparison on the performance basis. The comparison of performance on the time period basis will tell you the power of that fund and investment plan. Try not to invest on those plans which is strong towards market fluctuations.

Selecting right Fund House: A fund house or an Wealth management company is the company that manages Mutual Fund. If you select the right fund house, it will help you in getting good return on investment. Fund will be as good as the fund house you will choose. Your fund house will take decisions for your fund investments. If the fund house will not take the right decisions the investor will end up losing money. So before selecting your fund house properly read about the right Best Mutual Fund Advisor Delhi and fund house, and about the scheme you want your money to get invested. This will help you to reach your investment dreams.

Fund type: There are four types of sip investment plans are there. You can choose according to your amount and of goal of investment. These are-

Top-up SIP: Top-up SIPs allow investors to increase your amount at regular time period. You can increase the amount of investment if you think that the fund scheme in which you invested is performing well.

Flexible SIP: Flexible sip as its name shows are flexible. In these investment plans you can increase and decrease the amount of investment as per your financial situations. If investor runs out of money he can skip the payment, And when the investor has good amount of money he can deposit that in his sip account.

Perpetual SIP: Usually the investor signs ups in sip mutual funds for particular period of time like we can say 1 or 2 or 5 years. But if you don’t want to enter the time of end date then it is called as perpetual sip. This Sip gives option to the investor to redeem his fund when he wants to. Or whenever he feels that his financial aims are completed. Nevertheless, it is always to start SIP for a fixed period of time.

Trigger SIP: Trigger Sips are best for those investors who are aware and has some knowledge about the financial Markets.

Ratio of Expense: If you have researched enough and you find the funds that are similar in nature, then you can select the right fund according to their expense ratio. you can choose among them on the basis of expense ratio. This includes management fee and Total administrative price. a high expense ratio will knock down a fund’s performance.

Entry Load And Exit Load: Previously investing there was entry fee in the form of entry load, but , Securities and Exchange Board of India (SEBI) has stopped funds from levying an entry load. Therefore now, the only time you pay is when you leave a fund or we can say when you redeem the fund. This amount is called exit load. The amount of exit load differs with time period, amount of investment and scheme type. These Exit loads are regulated by SEBI.

These SIPs are the subject of market risks. You can ask for right portfolio management services from the right Certified financial planner in Delhi NCR.

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